Government and Opposition reach agreement on support for China-Australia free trade deal

The Government is pleased to confirm that support has been secured from the Opposition to ensure the passage through the Parliament of implementing legislation for the landmark China-Australia Free Trade Agreement (ChAFTA).

This high quality agreement, with our biggest trading partner, presents enormous opportunities for Australia in the years and decades ahead in terms of supporting growth and job creation. In this country, we have enjoyed decades of bipartisan support for freer trade and through the agreement reached with Labor this tradition is now set to continue.

Our discussions with Labor were both constructive and held in good faith, and Shadow Minister for Trade and Investment Penny Wong and her staff deserve credit for the work they have done on behalf of the Opposition.

Before ChAFTA can enter into force, Australia has to complete its necessary domestic processes and this includes the passage of the implementing customs tariff and rules-of-origin bills that are currently before the Parliament. To ensure this occurs, the Government has agreed to provide further clarity and comfort in regard to key issues raised by the Opposition.

Crucially, the provisions that we have agreed to with Labor will not in any way change or contravene the binding commitments we have made to China through our concluded FTA negotiations. Nor will they in any way discriminate against our biggest trading partner.

Work agreements

It is the firm view of the Government that Australians should always have priority in the labour market, and that overseas workers should only be recruited in circumstances that suitably qualified local workers are not available. To provide Labor with greater assurance of the Government’s commitment to this principle, the Government has agreed to amend an existing regulation. The amendment will simply prescribe the existing requirement under policy that employers seeking to sponsor skilled workers on 457 visas under work agreements will have to demonstrate that they have made recent and genuine efforts to recruit local Australian workers first.

This provision will apply to all work agreements, including those under the Investment Facilitation Arrangement (IFA), linked to ChAFTA. It is important to note that labour market testing is indeed already a mandatory requirement under current Government policy which is detailed in existing DIBP guidelines.

The Government has also agreed to make minor amendments to guidelines for companies seeking a work agreement. The amendments will incorporate additional criteria for the Minister to consider in approving work agreements. To ensure observance of the guidelines they will also be referenced in a new regulation.

The Department of Immigration and Border Protection (DIBP) will include in its annual report details about the number of work agreements signed, including the number of 457 visa holders engaged under the agreements, together with occupations and industries in which they are engaged. This will ensure programme transparency.

In regard to subclass 457 visas for overseas tradespersons, the Government will amend a visa condition to make it clear that visa holders must also obtain any licenses, registrations or memberships required under commonwealth or state or territory law. The visa holder will be required to notify the Immigration Department if their licence or registration is refused, revoked, ceased or cancelled.

We have also reaffirmed that DIBP will continue to investigate evidence-based allegations of non-compliance with visa conditions, including those concerning licensing and registration. The Department will also report annually on visa compliance monitoring.

TSMIT review

As recommended by the recent Independent Review of the Integrity of the Subclass 457 Programme, the Government will undertake an evidence-based review of the TSMIT (Temporary Skilled Migration Income Threshold). This review was scheduled to commence by the end of 2015, but has been brought forward as part of the agreement with Labor.

The TSMIT is the entry level point into the 457 programme, and positions with a market salary below the TSMIT are not eligible to be sponsored under the Subclass 457 programme.

The forthcoming review of the TSMIT will consider its current level (currently $53,900), whether it should be indexed and if so advise on an appropriate methodology.

The base rate will not be increased prior to this review which will commence before the end of this year. All relevant stakeholders will be consulted including peak business groups and the ACTU.

The agreement reached with the Opposition represents both a sensible outcome, which does not increase the current costs to business associated with 457 visa holders and major progress in terms of doing all we can to get this agreement into force as soon as possible so that the substantial benefits can begin to flow.